Money Matters: Creating a secure financial future in retirement 

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It’s retirement security week, the perfect time to make sure your savings are on track for a successful retirement. Barry Bigelow from Great Waters Financial joins us with tips to help you create a secure financial future in retirement. 

Q: How are Americans doing when to comes to saving for retirement?

  • Unfortunately, a lot of people are falling behind on their savings and may not be able to afford retirement. Only 56% of people are saving for retirement.
  • People are struggling to pay off debt and don’t feel like they have enough money to spare for savings.
  • Others aren’t saving enough because of the current turbulent economy. High inflation has caused nearly a quarter of people to reduce their retirement savings.
  • Having a secure retirement plan ensures you have the financial freedom to enjoy the activities you love and ensure your essentials are covered.

Q: What steps can we take to have a more secure retirement? 

Know Your Timeline 

  • Your saving and investment strategies will change over time depending on how far out from retirement you are. 
  • When you’re in your 20s and 30s, you should start saving early and be aggressive with your investments because you have time to likely bounce back from any market downturns.
  • In your 40s and 50s, you should increase your retirement savings and think about taking advantage of catch-up contributions to truly maximize your savings.
  • The amount of risk you take should lower once you’re near or in retirement. Have a plan to strategically use your savings, while allowing other portions of your portfolio to continue growing.
  • If you don’t understand how near or far retirement is, you may miss out on opportunities to grow your savings with age-specific strategies. 

Diversify Your Income

  • In retirement, your income is more important than your account balance. 
  • To have a secure retirement, you can generate income by using multiple investment strategies and income streams. These can include Social Security, annuities, withdrawals from retirement accounts, pensions, bonds and real estate. 
  • Someone may have a lot of money saved up, but those dollars can quickly be depleted without new sources of income.
  • The more diverse your income streams, the better you’ll be able to deal with and bounce back from market downturns.

Use Time Segmenting

  • When creating your portfolio, it’s important to use time segmenting, which is a strategy that diversifies your investments according to when they pay out.
  • This helps to make sure your retirement income can meet your needs.
  • For example, a couple going into retirement may put the money they’ll need in the next 10 years into bonds and CDs, while the rest of their portfolio can be divided into more aggressive investments since those dollars have time to grow.
  • If you want to learn more about investment strategies for retirement, follow Great Waters Financial on Facebook and LinkedIn.

Q: How do you determine how much income you’ll need in retirement? 

  • To know what kind of income you’ll need in retirement, you have to determine your lifestyle. 
  • Knowing what your expenses will be can help you create a secure retirement plan, but keep in mind that your expenses will likely be very different from your current situation. 
  • Take inventory of your values and figure out what you want to prioritize down the road in order to budget for the lifestyle you want.
  • For example, if you want to travel regularly, it’s important to have enough money to cover the additional expenses of airfare, food and excursions. You should always plan ahead for the dreams you have! 
  • At Great Waters Financial, we believe retirement is not the end of the road; we drive inspiration to help clients realize their dreams.